updated 04:10 pm EDT, Thu October 27, 2011

HP keeps PC group after all

HP on Thursday reversed its decision to possibly jettison its PC division. The Personal Systems Group would stay after a study determined that it was "right" for customers, shareholders, and staff. It based the conclusion off of the level of integration across the company, including the supply chain, as well as the brand value; recreating all these outside of the company would have been more expensive, HP said.

"HP is committed to PSG, and together we are stronger," CEO Meg Whitman said.

No mention has been made of any change to webOS hardware.

The statement confirms talk that HP was changing its mind on the original decision made by former CEO Leo Apotheker in August. At the time, many thought that his forced exit was due to the decision, which many interpreted as his attempt to recreate the business model of his previous employer, SAP, from the inside. Whitman on coming inside triggered confusion when she said plans were still on track and claimed that the issue wasn't the decisions themselves but the execution.

HP's rivals are widely thought to have looked forward to HP splitting off its PC division. It would have made the group a target for a sale and let them buy market share. If not a takeover, it would make the Personal Systems Group weaker by distancing the new company from the HP name, making it less familiar, as well as eliminating the safety net of the larger HP if it encountered trouble.

Many had questioned why HP would intentionally give up what's still considered the most successful PC division in the world. While Apotheker had acknowledged an iPad effect where a primarily Apple-led tablet push was cutting into HP netbook and notebook sales, HP stil leads in PC market share worldwide and isn't seeing the rapid drops of netbook-heavy companies like Acer.